The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1887-03-01

perlOu Dee1 CHOSEN unprecedented
competition for new business at an increase OF
commissions to agents and by giving them ad-
dltional commissions to throw Off to new IN
surers. all which have to come out of the mem
oers. and increase the cost OF insurance to all,
even to the new members who come in for the
sake of the rebate
Fortunately, your company has so large bust
ness already ON its books, of 80 admirable
quality and stable a character, that it can we'll
afford to foreeo any increase of its risks for
many years rather than increase them by in
creasing expenses and the cost of your insurance,
and can wait for the certain results of prudence
and calm Judgment to justify its position and
win it the favor of the sober-minded and careful
buyers of sound and really cheap insurance.
Its expenses for 1886 were only g. 2 per cent. Of
the income. which is seven-tenths of per cent.
less than in 1885, materially lower, it is believed,
than in any other company, and ranging from
2per cent. to over a. per cent. less than in its
most prominent rivals. They seek to distract
attention from the the vital point here involved
oy comparing expenses with new business or
some other novel and unrelated matter. But
the question which governs actual results is:
How much is received; how much is spent; how
much is left! 1t will not increase the amount
left for dividends to compare the amount spent
With something else than the income out of
which all has to come.
By the merits OF what we offer and by re-
organization of our agencies, We shall seek to
gain such and so much new business as is in
itself desirable to you. at no increase OF cost.
The rate of interest earned in 1886 was some
thing less than that for 1885, as was to be ex-
pected from the general rates for money through
out the year. But they were satisfactory under
| the circumstances, and afforded considerable
margin for surplus.
| A striking incident in the long continued de-
cline in interest and the growing difficulties in
the way of profitable and safe investment of
money is the recent sale of ST. 577. 900 three and
ahalf cent Missouri State bonds at a rate
| which will net the holder only 2 per cent.
1t affords rs profound satisfaction that so lon
ago as April, 1882. we based all calculations for
new business on the assumption of earning per
| cent interest instead of per cent, which still
remains the basis of all other companies
| RENTS OF REAL ESTATE
| During 1886 have declined in gross am cunt, ow
ing to the sale of some large rent producing
properties but the company is thereby freed Of
a considerable expense and the interest account
will be correspondingly improved
PROFIT AND LOSS.
During the year 1856 we have sold seventeen
pieces of real estate at net profit of SAL,
002 80. and four pieces for $40, $50 80 less than
| cost; balance profit real estate sales. $780,
44ZO2. 1t received by exchange of securities
profit of $50, COS 70, and lost by exchange, etc.
/
o3o 30; total balance profit and loss, STAT 282 go
| REAL ESTATE SALES.
| During the year 1886 the company has sold for
81, Ol4, i45 real estate which cost it 1888 697 98
and which was appraised in 1879 at $857, 500 81
This brings the total sales of real estate up to
Jan. to grand total of So 866. 1856 IA for prop
erty which cost US S., 152, 545 10, and which, on
the basis of the appraisal made In 1879
| would have brought only 81, 495 152 10.
profit of $7l3. 641. o. and gain over the ap-
prasal of 81, 81 034 55 make gratifying result
far. and furnish sufficient ground for the belief
| so often expressed that our real estate, as a
whole will prove to be no disadvantage to the
| company or its members.
| BONDS.
The company has sold during the year bonds
which cost it $3ll. 700, and has purchased others
at cost Of 1857, 74S. TO- increasing its net holding
| 1916, O4S. 10
We now hold bonds amounting to SO, 42S, 200
par value. which cost So $50 1919; their present
market value is at least $40, 354, 266. Should all
these bonds be held to maturity we should lose
$42l 999 of their cost. and $926066 of their pres
| emf mark,t value, They are all bonds OF ex-
celient quality, and having been issued when
high rates of interest prevailed they now bear
a high premium Many of them have long
time to run and will hold nearly their present
price for some years. if interest rates do not
materially advance It is the purpose of the di
rectors to change these securities so as to cap
italize as much as possible of the presen,
premium on them, course hitherto pursued
with good results.
The amount Of bank and railroad stocks held
by this company has always been small. The
principal transaction of the year the pur
chase of $3.50 900 of Connecticut & Passumpsit
River and Massawippi railroad stock, the pal
, value and per cent dividends being guaranteed
to the satisfaction of Jour directors
REAL ESTATE LOANS.
During the year loans have been paid amount
ing to So s01, 054 SO, and loans have been made
amounting to Sc l58, 253 IL. net increase in the
amount so invested of So, 1857, 198 55, and bring
ing the total to 500, 445, II.
No pains is spared to make these investment
the highest of their class.
STANDING.
, The Connecticut standard Of solvency-th,
) highest government standard in use-requires
, computation of our reinsurance reserve, accord
t ing to the combined experience mortality tabl
and the assumption of earning per cent. inter
est throughout the duration of all existing poll
cies By this standard our entire liabilities OF
JAN 1, 1887. were $50. AGO, $50 81
But on all policies issued since April /, 1882
our own calculations have been made on the AZ
sumption that will earn only per cent in
8 terest. believing that with the present tenden
ces in the rate of interest that is as high an as
sumption as 1t is safe to make relating to suc
: important contracts, some of which will hav
+ fifty or sixty years to run. Our liability on GU
l., own higher standard is $685. 1877 greater than b
the legal standard, and u.s. therefore, $50 CAB
387 "a.
i Our gross assets. Jan. l, were $50, 702, 493 "a
;. Our surplus by the legal standard was, there
FORE S., 242 243 40; and by our own higher stand
ard s. O5G log 40. increase of 500, 10S 40 du,
ing the year.
Q These facts and an inspection Of our schedul
l. of assets are conclusive as to the company
great financial strength as we'll as its magnitude